Accounting for Assets


When you acquire an asset, the cost of the asset is recorded on your company balance sheet. If you spent cash to acquire the asset, your cash account is reduced. If you borrowed money, your liabilities are increased. Here are some examples of how asset acquisitions are recorded in QuickBooks.

You write a check to place a $400 deposit with your utility company:

 

Debit

Credit

Other Assets:

Deposits

$400.00

 

Cash

 

$400.00


You take out a $100,000 mortgage on a building and also make a $10,000 cash down payment:

 

Debit

Credit

Fixed Assets:

Building

$110,000

 

Cash

 

$10,000

Mortgage Payable

 

$100,000


When you create a journal entry to record depreciation expense, these accounts are affected:

 

Debit

Credit

Depreciation Expense

$250.00

 

Accumulated Depreciation

 

$250.00


If you sell a fixed asset that cost $1,000 for $800 and you had previously recorded a depreciation expense of $520, here are the accounts that are affected:

 

Debit

Credit

Cash

$800.00

 

Accumulated Depreciation

$520.00

 

Fixed Asset

 

$1,000.00

Gain/Loss on Sale of Asset

 

$320.00





Show Me. QuickBooks 2006
Show Me QuickBooks 2006
ISBN: 0789735229
EAN: 2147483647
Year: 2005
Pages: 328
Authors: Gail Perry

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